By BRIAN WINGFIELD & YU-HUAY SUN
WASHINGTON (Bloomberg) -- Formosa Plastics
is seeking United States' permits for a $2 billion expansion of its Texas operations as
gas prices make US production more competitive.
The company asked federal and state environmental regulators
to approve plans for an ethane cracker unit and downstream
derivatives, Formosa Plastics Vice Chairman Susan Wang said in
an interview. She is visiting the United States as part of a
business delegation led by former Taiwan Vice President Vincent
Because of shale gas, the cost of making petrochemical and plastic-related
products is becoming very competitive here in the United
States, Wang said. Its probably as cost
effective as in the Middle East.
The investment is bigger than was previously planned by
Formosa Plastics as of February 2012, when it said it would
spend $1.7 billion to build two factories and a polyethylene
plastics plant in Texas.
One of the business delegations key aims is shoring up
United States support for Taiwans participation in the
proposed Trans-Pacific Partnership, a regional trade deal the
will cover the United States and 11 other nations, an area with
about $28 trillion in combined annual economic output. Taiwan
is seeking to join the talks, which dont include
Formosa Plasticss Wang said the Taipei-based company
expects to receive the environmental permits for an expansion at its Point Comfort
facility, about 200 km southwest of Houston, sometime within
the next year. Construction can begin immediately
thereafter, she said.
Environmental regulations in the United States are
quite reasonable, Wang said. The hurdles in Texas
are a shortage of skilled labor, due to the number of competing
facilities that need workers, and
the relatively high cost of shipping products by rail in the
United States, she said.
In the US, the group owns petrochemical plants, plastic
processing facilities and natural
gas wells. Last year, it applied to boost capacity in two
Texas chemical plants.
Wang said Formosa Plastics is at a crossroads in
determining whether to build or invest in an ethylene plant in
China. Taiwan last month lifted the ban on investing in Chinese
ethylene plants, also known as naphtha crackers for
the use of the petroleum distillate naphtha. China has yet to
ease its rules on ethylene investments across the Taiwan